With manufacturing and mining showing subdued performance, growth of factory output, based on Index of Industrial Production (IIP), dipped to 3 months low of 4.8 per cent in January, data from Statistics Ministry released on Monday showed.
According to an official statement, industrial production growth for December 2025 revised to 8 per cent from the provisional estimate of 7.8 per cent released in January 2026. Data further showed that the manufacturing sector’s output growth decelerated to 4.8 per cent in January 2025, compared to 5.8 per cent in the year-ago month.
Mining production growth also slowed marginally to 4.3 per cent compared to a growth of 4.4 per cent recorded a year ago. Power generation grew by 5.1 per cent in January 2025, compared to 2.4 per cent expansion in the year-ago period. During the April-January period of FY26, the country’s industrial production growth also slowed slightly to 4 per cent, compared to 4.2 per cent in the same period a year ago.
“The slowdown was broad-based across mining, manufacturing, and electricity, with some base effects also contributing to the deceleration. However, growth across sectors remains steady,” said Rajani Sinha, Chief Economist with CareEdge. On the demand side, consumer dynamics weakened, with consumer durables growth softening to 6.3 per cent (vs 12.4 per cent) and non-durables slipping into contraction at 2.7 per cent (vs 8.5 per cent). Even so, “the favourable impact of GST rate rationalisation and earlier RBI rate cuts is expected to continue supporting consumption going forward,” she said.
Adding to this, Aastha Gudwani – India Chief economist at Barclays said that sector-wise data showed broad-based moderation, with slower growth in manufacturing leading the deceleration in headline. “On the use-based front, barring infrastructure and construction goods, all other sub-categories saw slower growth rate in January vs December, with consumer non-durables, in fact, declining,” she said.
According to Vikrant Chaturvedi, Associate Director (Research) at Brickwork Ratings, on a use-based basis, growth was led by Infrastructure/Construction Goods at 13.7 per cent, followed by Intermediate Goods at 6 per cent and Capital Goods at 4.3 per cent, indicating continued traction in investment-linked segments. However, Consumer Non-Durables contracted by 2.7 per cent, pointing to some softness in mass consumption. “With the series continuing on the 2011-12 base, the data suggests stable but broad-based industrial momentum entering Q4 FY26. Going forward, sustained public infrastructure spending and a gradual recovery in rural and urban demand will be key to maintaining industrial growth momentum,” he said.
Now, experts see some improvement in coming months. “Looking ahead, ICRA expects the IIP growth to inch up to 5-6 per cent in February 2026, aided by a favourable base (January/February 2025: +5.2 per cent/+2.7 per cent),” Aditi Nayar, Chief Economist at ICRA said.
Published on March 2, 2026